US-based Costco Wholesale Corporation has purchased 45% minority interest in its joint venture Costco-Taiwan, for $1.05 billion (€1 billion), through a wholly-owned subsidiary.
The wholesaler now indirectly owns all of Costco-Taiwan.
The group estimates that the purchase will be approximately one to one and one-half percent accretive to earnings per share.
Costco Expansion
The retailer is continuing its international expansion and has outlined plans to open at least one store a year in Australia. The company also considers China is a potential growth market.
Costco currently operates 833 warehouses, including 574 in the United States and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland.
The chain also operates e-commerce sites in the US, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia.
Freight And Labour Costs
In May of this year, Costco Wholesale Corp has reported a decline in gross margins, hit by soaring freight and labour costs across the United States, and overshadowing an otherwise upbeat quarterly report.
In contrast to Walmart, Costco said there has not been much of a trade down or trade out from branded products to its private label product, Kirkland Signature.
Earlier in March 2022, Costco Wholesale Corp beat Wall Street estimates for quarterly revenue and profit, as consumers returned to its stores bought more groceries and splurged on high-margin items such as jewellery and home furnishing goods.
© 2022 European Supermarket Magazine – your source for the latest retail news. Article by Conor Farrelly. Click subscribe to sign up to ESM: European Supermarket Magazine.
